Lecture 1 - Econ Notes-Lecture 1 1/22/08 See Powerpoint-for...

Econ Notes-Lecture 1 1/22/08 See Powerpoint-for numbers Recent Trends 1. People borrowing money=credit which is slowing down the economy. Banks however are more afraid to lend, and then less is given out, less is spent, and this effects the economy. 2. Federal Reserve is trying to break the link of this spiral, by lowering interest rate. Business inventory is starting to rise, and they are spending less. Which is a downward spiral. 3. Giving money to spend. Money comes from taxes. There are many trade off, that oc-cur due to borrowing (people/countries). The money has to come from somewhere. 4/5. Possibly triggered the current recession. The negative wealth effect causes people to spend less in which causes a recession. 6. The value is less/weaker. This is good for our imports making things cheaper. Your going to want to buy in the united states because it would be cheaper than Europe, or China. BRIC countries have been booming, and they are currently buying around the world. 7. Price of oil has fallen due to the fact that people think we are going into recession.

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